THE PRESIDENT: Thank you very much. I have to tell you
that those of you here who have the privilege of being seated probably
missed what almost became the newest example of our reinvented,
full-service government. Just as the Vice President was becoming most
eloquent about how we were providing a full-service, high-quality
government, the people who were suffering in the sun standing in the
back almost got a shower along with their press conference when the
garden spray came on there. (Laughter.) I saw them moving closer and
closer and closer; I thought, well, maybe they can't hear. And then I
finally realized they were about to get a shower. (Laughter.) You come
back tomorrow, we'll start with a shower.

Let me begin by saying a special word of thanks to the Vice
President for the absolutely extraordinary energy and discipline and
dedication and quality of effort that he has put in over two and a half
years now. This has been an exceptional achievement. There's nothing
quite like it in the history of modern American government, and it would
not have happened had it not been for his leadership. And I am
profoundly grateful to him for it. (Applause.)

I also want to join in thanking the supporters we've had
among the members of Congress, the people in our administration who have
had to implement a lot of these recommendations. It's a lot easier to
talk about than to do, and they have had a difficult job to do. And I
thank the Cabinet especially and the agency heads for the embrace that
they have given this.

I want to say a special word of thanks to the reinventing
government staff and especially to the federal employees and to their
representatives. They have worked very, very hard at this difficult
job, and they have done it remarkably well.

Finally, I'd like to thank David Osborne and Tom Peters and
Philip Howard for the books they have written and the inspiration they
have provided. The Vice President and I and many of our team have read
them all with great care and have done our best to be faithful to the
ideas and principles which they have espoused.

When we were running for office, the Vice President and I,
back in 1992, we said that, if elected, we would do our best to give
this country a government that was smaller and less bureaucratic; that
had a lower cost, but a higher quality of service; that devolved more
power to states and localities and to entrepreneurs in the private
sector; that was less regulatory and more oriented toward incentives;
that had more common sense and sought more common ground. We have
surely not succeeded in everything we have tried to do, and I am certain
that there are areas where people could say we have erred. But we have
certainly been faithful to the effort and we have made, I think, a great
deal of progress in keeping the commitments that we made.

I wanted to do this because I thought it was important for
more than one reason. First of all, it was important because we had a
huge government deficit, we had quadrupled our debt in 12 years, and we
still needed to invest more money in certain critical areas of our
national life, in the education and training of our people, in research
and development, in new technologies, in helping people to convert from
a Cold War economy to the 21st century global economy. So it was
important; we needed to do it.

Secondly, we needed to do it because the level of anxiety
and alienation about people's relationship to the federal government
needed to be mended. We needed to make the government work better.

Thirdly, we needed to do it because of this historic era in
which we lived. We, after all, have moved through a rapid transition
now at the end of the Cold War, and at the end of the traditional
industrial economy into a global economy with new challenges, new
conflicts characterized by a high rate of change, rapid movement of
money, technology and capital, and revolutions in information and
technology. In that environment, the model that we use to deliver
government services and to fill public needs was simply no longer
relevant to the present and less so to the future. And so we began to
try not only to cut the size of the government, to cut the number of
programs, to cut the number of regulations, but to change the way the
government works and to develop new partnerships and to devolve
responsibilities to others would could more properly make the decisions.

There are so many examples of that that are not properly
part of this particular report now, but that have been driven by the
philosophy of the Vice President's reinventing government. We've given
every state in the country now the opportunity to reform it's own
welfare system without waiting for legislation to pass. It's a dramatic
thing. There's nothing like it in the history of modern American
government. And the philosophy of doing it grew out of the work we have
done with reinventing government.

When the Pentagon reformed its procurement procedures,
America laughed when the Vice President cracked the ashtray on the David
Letterman Show, but the taxpayers are better off and the national
defense is more secure because the money we're saving there can go in to
making our people safer and more secure and fulfilling the objectives of
the United States all around the world.

And there are many, many other things. The Secretary of
the Interior is not here, but he's done his best now to try to resolve
some of the thorniest conflicts between the federal government and
various groups in the western part of our country by pushing more of
these decisions down to local councils of people who can make them a
long way from Washington, but very close to where everyone has to live
with the consequences. And there's so many examples of this in every
department of every leader in the government here present. And I thank
them all for that.

Fundamentally, this is a question, though, about our
values. If you go back and read the Declaration of Independence and the
Constitution, you understand that the American people from our
beginnings meant for the government to do those things which the
government needs to do because they can't be done otherwise; meant for
the government to be an instrument of the public interest.

And we have a moral obligation to make sure that we do this
right, that we take the money earned by the hard efforts of the American
people and use it in ways that further the public interest. If we can't
justify doing that, we can't justify being here and we can't justify
taking the money. And we have a moral obligation to prepare the future
for our children and our grandchildren.

Now, this reinventing government effort is much more
important today in many ways than it was on the day I became President
because of the choices facing us now in the great budget debate in the
Congress. It is much more important now. If we are going to go forward
and balance the budget, if we're going to cut spending even more, we
have to be even more careful about how we spend the people's money and
what we do with the time of public servants and the power that public
servants have.

I believe very strongly that we have to balance the budget.
I think we have to do it to take the burden of debt off of future
generations. I think we have to do it to keep interest rates down and
to free up capital for investment now so that we can achieve higher
rates of growth. But I think that we have to do it in a way that will
achieve our objectives.

And what are our objectives? Our objectives are to grow
the American economy, to strengthen the American society, to free up
investment so that the American people can live up to their fullest of
their potential. That means that we cannot balance the budget in a way
that will drive us into a prolonged recession; that will cut off our
nose to spite our face; that will be penny-wise and pound-foolish; that
will aggravate the wage stagnation and the other problems that people
have in this country today, which means we have to have the money that
is left to invest in ways that really serve the American people and
serve their larger purposes.

We've reduced the annual deficit from $290 billion the year
I took office down to $160 billion this year. The total reduction is
about a trillion dollars over a seven-year period. We have to finish
the job, but we have to do it in a way that honors the purpose of a
balanced budget, which is to strengthen the future of America. We have
to decide, in other words, what is important for us today and what's
important for our future.

Of course, the federal government was too large and needed
to be cut back. Of course, there is still waste and duplication. Of
course, there are still regulations that don't make a lick of sense, and
they needed to be changed, and they need to be changed. But we have to
keep in mind there are still public purposes that as far as we know
today cannot be fully discharged without the involvement of America's
national government -- the health care of elderly citizen; protection of
our environment; the safety of our food; the needs of the people whose
triumph we celebrated in Hawaii last weekend who won the second world
war for us and paved the way for the last 50 years of the American
century, giving the poor a chance to work their way into the middle
class, and giving our children and now increasingly our adults access to
the best possible education opportunities. Those are the value and
priorities of the people of this country. They have to be reflected in
the budget as well.

The Vice President's report that I received today has over
180 specific cuts in government that will save over $70 billion in the
next five years. One by one, these are not the kind of cuts that make
headlines and, I guess, I don't expect them to make too many headlines
tomorrow. But when you put them all together, as Everett Dirksen said
once, a billion here and a billion there, and pretty soon you're talking
about real money. (Laughter.)

These are the kind of cuts that will allow us to balance
the budget without cutting the single most important investment we can
make in our future -- education. That's why I was able to give to the
Congress a balanced budget plan that increases education. By contrast,
the proposals of the congressional majority spend $76 billion less on
education and training than I do in the next seven years. They make
deep cuts in education at a time when it's more important than ever
before. That's why so many people estimate that that budget could
actually slow the rate of economic growth over the next seven years
instead of increase it, which is the whole purpose of balancing the
budget -- to grow and strengthen the economy.

If the congressional proposal is passed, fewer children
will go to Head Start, fewer schools will be able to teach their
children to stay away from drugs and gangs, or have the resources to use
the best possible technology or have smaller classes or set up the
charter schools when the existing system is not working. There won't be
as many young people who get scholarships to go on to college. And the
cost of the college loan program to ordinary students will go up
dramatically in ways that will reduce the number of people that go to
college at precisely the time we need to see them increasing.

Now, that is really what this choice is all about. There
was -- I thought that chart was showing when it blew down, but you can
see here that we have to make these kind of choices. Should we balance
the budget by reducing education spending by $76 billion, or should we
cut $70 billion in government waste and duplication? Do we want fewer
people to go to college? Do we want larger classes in our schools? Do
we want to scale back our efforts to keep our schools safer and
drug-free? Do we want to say that having the highest standards for what
we teach our children is not a proper objective for the education
budget? I don't think we do.

And the point I want to make to you all is we do not have
to do this. The sacrifice of all these people in government to promote
this reinventing government project must not be in vain. We must take
the money that is left and spend it properly. We must take the money
that is left and spend it properly. (Applause.)

Let me give you some examples of the cuts in Appendix C of
the Vice President's report. Like I said, a lot of them don't sound
very interesting, but after you add them up, they -- you got some real
money there -- $118 million by closing 200 weather stations with the
National Weather Service, because computers do the job better and
cheaper; $14 million in the Small Business Administration by
consolidating their loan-processing operations.

Let me just point out, the SBA, in the last two years, has
cut their budget by 40 percent and doubled their loan volume. Don't
tell me that we can't make government work better. Doubled their loan
volume and cut their budget. (Applause.)

Secretary Cisneros has proposed a remarkable plan for the
Department of Housing and Urban Development. They have three basic
responsibilities -- public housing, affordable housing, and economic
development. Instead of running 60 programs to do three things, now
they've proposed to run three programs to do three things and save $825
million in administrative costs alone, not money that would otherwise go
to Mayor Rice out in Seattle or the other local leaders around our
country, but administrative costs. It is wrong, in a time when you have
to balance the budget, for us to take one red cent in administrative
costs that does not have to be taken when the money ought to be put on
the streets of America to benefit the American people. And I thank you
for that, Secretary. (Applause.)

The Clean Coal Technology Project was implemented to
develop a way to burn coal cleanly, as cleanly as it could possibly be
burned. Well, they did it. The project was started to do that job. It
did the job, but nobody ever closed it down. Now, we're going to do
that -- not because it failed, but because it succeeded.

The Naval Petroleum Reserve in Elk Hills, California, was
created during World War I because America's new battleships needed oil.
Well, I think World War I is over, and I know that the strategic need
for the Navy to have its own oil fields has long since passed.

By eliminating the Clean Coal Technology Program,
privatizing Elk Hills, and doing a lot of other cuts like this in the
energy area, the Energy Department will save $23 billion over the next
five years. That's a great tribute to the Energy Department's
recommendations, and it's the right thing to do. (Applause.)

Believe it or not, the National Oceanic and Atmospheric
Administration has a core of 400 officers who command a fleet of less
than 10 old ships. I think that we can be adequately protected by the
Army, the Navy, the Air Force, the Marines and the Coast Guard. So
we're going to stop paying for those 10 old ships and use the money for
better purposes.

Well, you get the picture. These are common sense things.
We've been working on this hard for two years, and we still keep finding
these opportunities, and we will continue to do it.

How do people know this will work? How do they know that
the savings on paper will become savings in the bank? Well, we have got
a track record on that. The Vice President's first report predicted we
could save $108 billion in five years by reinventing government. After
two years, $58 billion is already in the bank; that much has been
implemented and saved, in law, in fact. More than half the savings
promised in less than half the time.

Two years ago we said we could shrink the size of
government by 252,000 positions. With the help of Congress offering us
humane and decent buyout proposals, the federal government today has
160,000 people fewer on the payroll than it did on the day I took
office. We are well ahead of schedule on the 252,000. (Applause.)

At the same time, the people who are left are doing their
jobs better, and they ought to get credit for it. Last May, Business
Week, not an arm of the administration -- Business Week Magazine ran an
article about the best customer service in America on the telephone.
They rank companies -- great companies like L.L. Bean, Federal Express
and Disney World -- people who, for different reasons, need to be very
effective on the telephone.

But do you know who they said provides the most "courteous,
knowledgeable and efficient" telephone customer service in the country?
The Social Security Administration of the United States government.
(Applause.) I am very proud of that, and you should be, too.
(Applause.)

The operators at Social Security are some of the thousands
of people who are proving the skeptics wrong, people who think
government can never do anything right. Because of their hard work, we
know we can balance the budget without cutting education and risking our
children's future. But I will say again, we have to make some
decisions.

When I became President, I just want to mention one other
-- I asked the Secretary of State and the Secretary of Commerce to work
together to make sure we started promoting America's economic interest
overseas. I have had 100 businesspeople in the last two years tell me
that for the first time in their entire business lives, every time they
go to another country, the State Department is working for them. I have
had -- I have never talked to a businessperson who has extensive
dealings overseas doesn't tell me that the Commerce Department is more
effective in promoting the interests of American businesses and American
jobs around the world than at any time in the past. That is also part
of reinventing government. We want you to get more for your money, not
just reduce the size of government.

This can happen, but we need to continue to do this. This
has to be a continuous process. Our goal, the Vice President's and
mine, is to build this into the culture of government so that no future
administration can fail to embrace this. Our goal is to make this a
part of the daily lives, the breathing, the working habits of every
manager in the government, every federal employee, everybody. We want
them to think about it because, believe me, there are still things that
go on every day in the government that the President can't know about,
the Vice President can't know about, but that will affect the lives and
the interests and the feelings of the American people.

But we are making a difference. Now we have to decide in
this budget debate how we're going to cut, how we're going to balance
the budget. This is just like the productivity changes that many large
American companies underwent throughout the 1980s. I know we can keep
doing this. I know we can do more than even we think we can do. I know
we can.

But this is the sort of thing we ought to be doing. And it
would be a great mistake if in the next 90 days in the desire to balance
the budget, which I share fully and which we started and which has taken
us from a $290 billion deficit to $160 billion deficit, we became
penny-wise and pound-foolish. And we forgot that one of the reasons
we're doing this is to make sure that the money left can advance the
cause of America's economic interest and the basic values of the
American people to give every citizen the chance to live up to his or
her God-given capacity, to keep the American Dream alive, and to give us
a chance to come together in a prosperous, secure and exciting future.
That is ultimately -- ultimately -- the great benefit of this whole
effort.

So I ask you to continue to support it and, as we come to
this budget debate, to say, we do not -- we do not have to make the
wrong choices for the right objective. We can balance the budget and we
can do it in a way, and reinventing government proves it.